Compensation call over energy deals

Energy companies should pay compensation to customers who were mis-sold gas and electricity contracts on the doorstep, MP have said.

PUBLISHED: 08:05, Mon, Jul 25, 2011

Energy companies should pay compensation to customers who were mis-sold gas and electricity contract [PA]

The Energy and Climate Change select committee is concerned customers bamboozled by the array of complex tariffs for electricity and gas are being pressured by salesmen into contracts with different suppliers no better or even worse than their current one.

Energy regulator Ofgem estimates that 40% of people who switch do not get a better deal.

Tim Yeo, chairman of the select committee, said: "If it turns out that consumers are being persuaded to switch contracts when it's not in their best interests, by salespeople keen to earn commission, then it would only be right for the energy companies to cough up compensation."

He urged the companies to take action themselves without waiting for the Government or Ofgem to act.

Scottish & Southern Energy (SSE), one of the big six group of energy suppliers, recently suspended all of its doorstep activity after being found guilty of two counts of mis-selling in a case brought by Surrey County Council.

SSE, which is appealing against the Surrey verdict, said that the market had changed, with fewer people willing to engage with traditional doorstep sellers.

Mr Yeo welcomed SSE's decision and urged the rest of the Big Six to ditch the "Del Boy tricks" and concentrate on giving customers the information they need to choose the correct contract.

A spokesman for the regulator Ofgem said: "The select committee is right to highlight the issue of compensation for customers. Ofgem's recent review of the retail market signalled that there may be a case for additional powers for the regulator to better protect and put right problems for consumers."

Consumer groups welcomed the MPs' report. Mike O'Connor, chief executive of Consumer Focus, said: "This is a broadside from MPs on whether consumers can trust energy companies to sell fairly, especially on the doorstep. Cold calling on the doorstep should end now."

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